USA

USD bears continue to dominate as Fed Chairman Yellen`s dovish comments are further priced in. The EURUSD has made new yearly highs by surpassing 1.1375 while the AUDUSD breached 0.7700 to post highs not seen since June 2015. The GBPUSD on the other hand has seen subdued trading with the UK woes weighing on the pair as it flirts with 1.4400.

Data out of the US yesterday was mixed and not enough to dismay USD bears, with Unemployment Claims marginally worse than expected (276K vs 266K) and the Chicago PMI positing better than expected at 53.6 vs 50.5.

Today promises to be a day filled with volatility as we see several key releases being made from the US, markets and the FED will be watching these figures closely as they try figure out the true status of the US economy. Better than expected numbers will see the Fed relax its dovish tone and might just be enough to put rate hikes back on the table earlier rather than later. The expected data is as follows:

  • Non-Farm Employment Change expected at 206K, lower than last month’s 242K
  • Average Hourly Earnings m/m expected at 0.2%, higher than last month`s -0.1%
  • Unemployment Rate expected at 4.9%, in line with the previous release
  • ISM Manufacturing PMI expected at 50.8, higher than last month’s release of 49.5
  • Revised UoM Consumer Sentiment expected at 90.6, higher than last month’s 90.0

UK

The GBP remained muted against the USD and lost ground against most other currencies as releases out of the region continue to be negative. The Current Account data showed a decrease of 32.7B vs an expected -21.1B and the Net Lending to Individuals increased this month by 4.9B vs an expected 51.B. While, the economies only saving grace came in the form of the Final GDP q/q figure which showed the economy expanded more than expected at 0.6% vs 0.5%.

Today sees the release of the all-important Manufacturing PMI (expected at 5.4) being released which will have GBP bulls on edge as they continue to look for a reason to keep the GBP bid.

EUROPE

Data out of the EU came in neutral to positive with the Core CPI Flash Estimate y/y being the main highlight as it surpassed expectation to print 1% vs the expected 0.9%. Today sees a barrage of data out of the EU, which bulls will hope can further fuel their recent momentum. The data expected is as follows:

  • Italian, German, Spanish and French Manufacturing PMI`s expected at 52.6, 50.4, 53.8 and 49.6 respectively
  • EU Final Manufacturing PMI expected in line with last month’s release of 51.4
  • EU Unemployment Rate expected unchanged from last month at 10.3%